BILL REQ. #:  S-1593.5 

READ FIRST TIME 02/27/03.   

     AN ACT Relating to the provision of greater predictability and consistency in the state wage and hour laws; amending RCW 49.46.005, 49.46.040, 49.46.100, and 49.48.040; adding new sections to chapter 49.46 RCW; adding new sections to chapter 49.48 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 49.46.005 and 1961 ex.s. c 18 s 1 are each amended to read as follows:
     ((Whereas)) The establishment of a minimum wage for employees is a subject of vital and imminent concern to the people of this state and requires appropriate action by the legislature to establish minimum standards of employment within the state of Washington((,)) consistent with the standards established in the federal fair labor standards act unless the legislature has expressly established a different standard. Therefore the legislature ((declares that in its considered judgment the health, safety and the general welfare of the citizens of this state require the enactment of this measure, and exercising its police power, the legislature endeavors by)), under this chapter ((to)), establishes a minimum wage and other conditions of employment for employees of this state, consistent with requirements of the federal fair labor standards act unless the legislature has enacted an expressly different requirement, to encourage employment opportunities within the state. The provisions of this chapter are enacted in the exercise of the police power of the state for the purpose of protecting the immediate and future health, safety and welfare of the people of this state.

NEW SECTION.  Sec. 2   A new section is added to chapter 49.46 RCW to read as follows:
     All terms, provisions, rights, and obligations in this chapter shall be given the same meaning as given to comparable terms, provisions, rights, and obligations under federal law, 29 U.S.C. Secs. 202 through 262, and the regulations and statements of general policy and interpretation applying and interpreting those terms issued by the United States department of labor. In the absence of any term, provision, right, or obligation in this chapter contained in federal law, 29 U.S.C. Secs. 202 through 262, or in the regulations and statements of general policy and interpretation applying and interpreting those terms issued by the United States department of labor, then such federal provisions shall control in any action arising under this chapter. However, this section shall not apply to the extent any term or provision of this chapter, or any formal rule adopted by the department of labor and industries interpreting and applying this chapter, is expressly contrary to the comparable provision of federal law, 29 U.S.C. Secs. 202 through 262, or in the regulations and statements of general policy and interpretation applying and interpreting those terms issued by the United States department of labor.

NEW SECTION.  Sec. 3   A new section is added to chapter 49.46 RCW to read as follows:
     (1) An employer found to have violated a provision requiring payment of wages under this chapter in a citation or notice of assessment issued by the director of labor and industries or the director's authorized representative: Must pay any wages due to the employee and may be assessed a civil penalty of not less than one hundred dollars and not more than one thousand dollars per employee who is owed wages. The department shall not impose more than one civil penalty per employee who is owed wages regardless of the duration of the violation or number of provisions violated. A subsequent civil penalty may be issued for a repeat violation that follows the exhaustion of appeals by the employer for a first violation.
     (2) The director of labor and industries may waive collection of a portion or all of the penalties assessed under this chapter in favor of the full payment of wages owed to the employee if the violation is inadvertent, infrequent, or de minimus. Additionally, the department shall not assess the penalty if it finds a violation to be inadvertent, infrequent, or de minimus, the employer reimburses the employee, and the employer promises to comply in the future.
     (3) The director of labor and industries, or the director's authorized representative, may require payment of unpaid wages and may assess all civil penalties authorized by this section. When considering the amount of penalties for multiple violations found in a citation and notice of assessment, the director, or the director's authorized representative, may consider the appropriateness of the penalty with respect to the number of affected employees of the employer being charged for each violation, the gravity of the violations, the duration of the violations, the size of the employer's business, the good faith of the employer, the history of previous violations, and other relevant factors.
     (4) Civil penalties imposed under this chapter shall be paid to the director of labor and industries for deposit in the employment standards enforcement account established under section 11 of this act. The department shall use these funds exclusively for the employment standards program.
     (5) The employer shall pay wages and the civil penalty amount assessed under this section within thirty days of receipt of the assessment or notify the director of his or her intent to appeal the citation or the assessment penalty as provided in section 7 of this act.

Sec. 4   RCW 49.46.040 and 1959 c 294 s 4 are each amended to read as follows:
     (1) The director or his designated representatives may investigate and gather data regarding the wages, hours, and other conditions and practices of employment in any industry subject to this chapter, and may enter and inspect such places and such records (and make such transcriptions thereof), question such employees, and investigate such facts, conditions, practices, or matters as he may deem necessary or appropriate to determine whether any person has violated any provision of this chapter, or which may aid in the enforcement of the provisions of this chapter. The director or the director's authorized representative shall notify the employer before conducting the investigation. Before conducting an inspection, the department must notify the person whose premises and records are being inspected that he or she has the right to refuse the inspection.
     (2) With the consent and cooperation of federal agencies charged with the administration of federal labor laws, the director may, for the purpose of carrying out his functions and duties under this chapter, utilize the services of federal agencies and their employees and, notwithstanding any other provision of law, may reimburse such federal agencies and their employees for services rendered for such purposes.
     (3) Every employer subject to any provision of this chapter or of any order issued under this chapter shall make, keep, and preserve such records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him, and shall preserve such records for such periods of time, and shall make reports therefrom to the director as he shall prescribe by regulation as necessary or appropriate for the enforcement of the provisions of this chapter or the regulations thereunder.
     (4) The director is authorized to make such regulations regulating, restricting, or prohibiting industrial homework as are necessary or appropriate to prevent the circumvention or evasion of and to safeguard the minimum wage rate prescribed in this chapter, and all existing regulations of the director relating to industrial homework are hereby continued in full force and effect.

Sec. 5   RCW 49.46.100 and 1959 c 294 s 10 are each amended to read as follows:
     (1) Any employer who has received notice of an investigation authorized under this chapter and who hinders or delays the director or ((his)) the director's authorized representatives in the performance of ((his)) the director's duties in the enforcement of this chapter, ((or refuses to admit the director or his authorized representatives to any place of employment,)) or fails to make, keep, and preserve any records as required under the provisions of this chapter, or falsifies any such record, or refuses to make any record accessible to the director or ((his)) the director's authorized representatives upon demand, or refuses to furnish a sworn statement of such record or any other information required for the proper enforcement of this chapter to the director or ((his)) the director's authorized representatives upon demand, or pays or agrees to pay wages at a rate less than the rate applicable under this chapter, or otherwise violates any provision of this chapter or of any regulation issued under this chapter shall be deemed in violation of this chapter and shall, upon conviction therefor, be guilty of a gross misdemeanor.
     (2) Any employer who discharges or in any other manner discriminates against any employee because such employee has made any complaint to his or her employer, to the director, or ((his)) the director's authorized representatives that he or she has not been paid wages in accordance with the provisions of this chapter, or that the employer has violated any provision of this chapter, or because such employee has caused to be instituted or is about to cause to be instituted any proceeding under or related to this chapter, or because such employee has testified or is about to testify in any such proceeding shall be deemed in violation of this chapter and shall, upon conviction therefor, be guilty of a gross misdemeanor.

NEW SECTION.  Sec. 6   A new section is added to chapter 49.46 RCW to read as follows:
     In any action or proceeding based on any act or omission on or after the effective date of this section, no employer is subject to liability or punishment for or on account of the failure of the employer to pay minimum wages or overtime compensation under this title if the employer pleads and proves that the act or omission complained of was in good faith in conformity with and in reliance on any written administrative rule, order, ruling, approval, or interpretation of the department, or any administrative practice or enforcement policy of the department with respect to the class of employers to which the employer belonged. Such a defense, if established, is a bar to the action or proceeding, notwithstanding that after the act or omission, the administrative rule, order, ruling, approval, interpretation, practice, or enforcement policy is modified or rescinded or is determined by judicial authority to be invalid or of no legal effect.

NEW SECTION.  Sec. 7   A new section is added to chapter 49.46 RCW to read as follows:
     A person, firm, or corporation aggrieved by a citation or notice of assessment issued by the department of labor and industries under this chapter may appeal the action or decision to the director of labor and industries by filing notice of the appeal with the director within thirty days of the department's issuance of a citation or notice of assessment, otherwise the citation or notice of assessment is final and binding. A notice of appeal filed under this section shall stay the effectiveness of a citation or notice of the assessment of a penalty pending review of the appeal by the director. Upon receipt of an appeal, a hearing shall be held in accordance with chapter 34.05 RCW. The director shall issue all final orders after the hearing. The final orders are subject to appeal in accordance with chapter 34.05 RCW, with the prevailing party entitled to recover reasonable costs and attorneys' fees. Orders that are not appealed within the time period specified in chapter 34.05 RCW are final and binding.

NEW SECTION.  Sec. 8   A new section is added to chapter 49.46 RCW to read as follows:
     Nothing in this chapter prohibits an employee from initially pursuing a private right of action against an employer for unpaid wages. The remedies provided by this chapter are not available if any person pursues a private right of action against an employer. Similarly, an employee who files a wage claim with the department of labor and industries is electing an administrative remedy and is barred from pursuing a private right of action from that date forward.

NEW SECTION.  Sec. 9   A new section is added to chapter 49.46 RCW to read as follows:
     The director may adopt rules to carry out the purposes of this chapter. Such rules must narrowly construe this chapter.

NEW SECTION.  Sec. 10   A new section is added to chapter 49.46 RCW to read as follows:
     The adoption of rules described in section 9 of this act must be made before December 1st of any year, and the rules may not take effect before the end of the regular legislative session in the next year.

NEW SECTION.  Sec. 11   A new section is added to chapter 49.46 RCW to read as follows:
     The employment standards enforcement account is created in the state treasury. All receipts from civil penalties assessed under this chapter and chapter 49.48 RCW must be deposited in the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may only be used for the employment standards program.

NEW SECTION.  Sec. 12   A new section is added to chapter 49.48 RCW to read as follows:
     (1) An employer shall pay each employee all wages due on an established payday for each pay period.
     (2) An employer found to have violated a provision requiring payment of wages under this chapter in a citation or notice of assessment issued by the director of labor and industries or the director's authorized representative: Must pay any wages due to the employee and may be assessed a civil penalty of not less than one hundred dollars and not more than one thousand dollars per employee who is owed wages. The department shall not impose more than one civil penalty per employee who is owed wages regardless of the duration of the violation or number of provisions violated. A subsequent civil penalty may be issued for a repeat violation that follows the exhaustion of appeals by the employer for a first violation.
     (3) The director of labor and industries may waive collection of a portion or all of the penalties assessed under this chapter in favor of the full payment of wages owed to the employee if the violation is inadvertent, infrequent, or de minimus. Additionally, the department shall not assess the penalty if it finds a violation to be inadvertent, infrequent, or de minimus, the employer reimburses the employee, and the employer promises to comply in the future.
     (4) The director of labor and industries, or the director's authorized representative, may require payment of unpaid wages and may assess all civil penalties authorized by this section. When considering the amount of penalties for multiple violations found in a citation and notice of assessment, the director, or the director's authorized representative, may consider the appropriateness of the penalty with respect to the number of affected employees of the employer being charged for each violation, the gravity of the violations, the duration of the violations, the size of the employer's business, the good faith of the employer, the history of previous violations, and other relevant factors.
     (5) Civil penalties imposed under this chapter shall be paid to the director of labor and industries for deposit in the employment standards enforcement account established under section 11 of this act. The department shall use these funds exclusively for the employment standards program.
     (6) The employer shall pay wages and the civil penalty amount assessed under this section within thirty days of receipt of the assessment or notify the director of his or her intent to appeal the citation or the assessment penalty as provided in section 14 of this act.

Sec. 13   RCW 49.48.040 and 1987 c 172 s 1 are each amended to read as follows:
     (1) The department of labor and industries may:
     (a) Conduct investigations to enforce section 12 of this act and to ensure compliance with this chapter and chapter 49.46 RCW, upon obtaining credible information indicating an employer may be committing a violation under this chapter((s 39.12,)) and chapter 49.46((, and 49.48)) RCW((, conduct investigations to ensure compliance with chapters 39.12, 49.46, and 49.48 RCW)). The director or the director's authorized representative shall notify the employer before conducting the investigation. Before conducting an inspection, the department must notify the person whose premises and records are being inspected that he or she has the right to refuse the inspection;
     (b) Order the payment of all wages owed the workers and institute actions necessary for the collection of the sums determined owed under section 12 of this act; and
     (c) ((Take assignments of wage claims and)) Prosecute actions for the collection of wages ((of)) for persons who are financially unable to employ counsel when in the judgment of the director of the department the claims are valid and enforceable ((in the courts)).
     (2) The director of the department or any authorized representative may, for the purpose of carrying out RCW 49.48.040 through 49.48.080 and section 12 of this act: (a) Issue subpoenas to compel the attendance of witnesses or parties and the production of books, papers, or records; (b) administer oaths and examine witnesses under oath; (c) take the verification of proof of instruments of writing; and (d) take depositions and affidavits. If assignments for wage claims are taken, court costs shall not be payable by the department for prosecuting such suits.
     (3) The director shall have a seal inscribed "Department of Labor and Industries--State of Washington" and all courts shall take judicial notice of such seal. Obedience to subpoenas issued by the director or authorized representative shall be enforced by the courts in any county.
     (4) ((The director or authorized representative shall have free access to all places and works of labor.)) Any employer or any agent or employee of such employer who ((refuses the director or authorized representative admission therein, or who)), when requested by the director or authorized representative, willfully neglects or refuses to furnish the director or authorized representative any statistics or information pertaining to his or her lawful duties, which statistics or information may be in his or her possession or under the control of the employer or agent, shall be guilty of a misdemeanor.
     (5) An action for relief under this section shall be commenced within three years after the cause of action accrues, unless a shorter period of time applies under law.

NEW SECTION.  Sec. 14   A new section is added to chapter 49.48 RCW to read as follows:
     A person, firm, or corporation aggrieved by a citation or notice of assessment issued by the department of labor and industries under this chapter may appeal the action or decision to the director of labor and industries by filing notice of the appeal with the director within thirty days of the department's issuance of a citation or notice of assessment, otherwise the citation or notice of assessment is final and binding. A notice of appeal filed under this section shall stay the effectiveness of a citation or notice of the assessment of a penalty pending review of the appeal by the director. Upon receipt of an appeal, a hearing shall be held in accordance with chapter 34.05 RCW. The director shall issue all final orders after the hearing. The final orders are subject to appeal in accordance with chapter 34.05 RCW, with the prevailing party entitled to recover reasonable costs and attorneys' fees. Orders that are not appealed within the time period specified in chapter 34.05 RCW are final and binding.

NEW SECTION.  Sec. 15   A new section is added to chapter 49.48 RCW to read as follows:
     Nothing in this chapter prohibits an employee from initially pursuing a private right of action against an employer for unpaid wages. The remedies provided by this chapter are not available if any person pursues a private right of action against an employer. Similarly, an employee who files a wage claim with the department of labor and industries is electing an administrative remedy and is barred from pursuing a private cause of action from that date forward.

NEW SECTION.  Sec. 16   A new section is added to chapter 49.48 RCW to read as follows:
     The director of labor and industries may adopt rules to carry out the purposes of this chapter. Such rules must narrowly construe this chapter.

NEW SECTION.  Sec. 17   A new section is added to chapter 49.48 RCW to read as follows:
     The adoption of rules described in section 16 of this act must be made before December 1st of any year, and the rules may not take effect before the end of the regular legislative session in the next year.